ED SCHULTZ, HOST: Good evening, Americans, and welcome to THE ED SHOW live from Minneapolis.

Well, it`s 5:00 Eastern. Let`s get to work.

(BEGIN VIDEOTAPE)

RUSH LIMBAUGH, CONSERVATIVE RADIO HOST: That town has been a Petri dish of everything the Democrat Party stands for.

UNIDENTIFIED MALE: Take him to Detroit.

UNIDENTIFIED MALE: No! Not Detroit!

BEYONCE: I love you, Detroit.

(CHEERS)

LIMBAUGH: Massive unions, massive pensions.

STEPHEN COLBERT, COMEDIAN: Yes, lavish pensions. On average $19,000 a year which Detroit now says they will pay 10 cents on the dollar.

SCHULTZ: When union membership goes down, so do middle class wages.

BILL O`REILLY, FOX NEWS: Then the unions came in. Then the Democratic machine came in. Then, the drugs came in.

SCHULTZ: Every politician who puts their hand on the Bible and takes the oath of office has a duty to this city and to manufacturing in this country.

DENNIS MILLER, RADIO TALK SHOW HOST: It yields a cat like Kid Rock. It must have good stuff in it. But the Dems ran it into the ground.

GEORGE WILL, CONSERVATIVE COMMENTATOR: They don`t have a fiscal problem, Steve. They have a cultural collapse.

(MUSIC)

(END VIDEOTAPE)

SCHULTZ: See all those people in those pictures there, folks? Have you ever seen so many Americans be a failure at so many things? Here we go again. I will not let this story go. There is more evidence Detroit is truly, truly a conservative utopia.

Yes, I`m not going to get off this story. And it is something this country needs to pay attention to. Conservatives keep blaming everything but their own bankrupt policies for Detroit`s financial troubles. Here we go again this week. The Republicans` top water carrier and their favorite conservative columnist took turns bashing the city and its people. We are now getting into the territory of insults.

Rush Limbaugh started by blaming the Democrats.

(BEGIN VIDEO CLIP)

LIMBAUGH: That town has been a Petri dish of everything the Democrat Party stands for. Everything the Democrat Party loves. Massive unions, massive pensions, pay people pensions, and health care, long after they`ve stopped working. The math doesn`t add up.

You have massive welfare states where citizens are giving things left and right in order to buy their votes.

(END VIDEO CLIP)

SCHULTZ: Well, the conservative Grand Poobah of talk radio also showed his true colors by attacking African-Americans.

(BEGIN VIDEO CLIP)

LIMBAUGH: You bring on Mayor Coleman Young who causes the riots in 1967, Detroit, and Mayor Young calls a white flight to suburbia and Detroit is left with nothing but liberal Democrats running it.

WILL: Can`t solve the problems because their problems are cultural. You have a city, 139 square miles. You can raise cattle in vast portions of it. Dangerous herds of feral dogs roaming there.

You have 3 percent of fourth graders reading at the national math standards. Forty-seven percent of Detroit residents are functionally illiterate, 79 percent of Detroit children are born to unmarried mothers. They dome have a fiscal problem, Steve. They have a cultural collapse.

(END VIDEO CLIP)

SCHULTZ: Hold it right there. You mean to tell me that a third grader just absolutely just out of nowhere learns to read? Teaching doesn`t mean anything. Resourcing classrooms?

No. There`s supposed to be magic being made in a big city like Detroit where jobs are being shipped overseas. Let`s just turn it over and blame the kids. It`s a cultural problem. It`s the corporate culture that has starved the city.

So, now, George Will is taking the insults to an entirely new level and blaming an entire political system for Detroit`s problems. George Will calls the city`s bankruptcy Detroit`s death by democracy. Isn`t it ironic they`ve taken democracy away from Detroit?

He compares the unions to a parasite. Conservatives want to see, plant this image of this disgusting bug in your mind when you hear the word union.

George Will says the unions devoured Detroit from inside out, leaving nothing but an empty husk. Conservatives are using the most insulting language possible that they can come up with to blame unions, blame black people, blame their culture for Detroit`s troubles.

But the real parasites, my friends, are their conservative ideals coming from state government and from the Feds. "Forbes" -- this is a success story -- "Forbes" reports that Detroit automakers posted their best July sales since 2006.

The people who once built the cars won`t get the pensions they were promised. But the big automakers are doing just fine after we help them out with federal money. But for the worker? To hell with the workers. Workers don`t mean anything.

This is the conservative utopia. An entire city is decimated after spending decades in service to a major industry which is manufacturing. None of these conservatives are going to go out and bail out Detroit who helped out the automobile industry.

They`re not going to do that the same way they did the automobile industry. In fact, Detroit gets less financial help from the federal government than the country of Colombia who we help out all the time. The United States is going to be sending Colombia about $323 million next year while Detroit is slated to get less than $109 million. They`ve already said that they`re going to use that for bulldozing communities?

The stock market is seeing record highs and major company are celebrating big sales. That`s good for America. But where is the investment in American workers? So, we`re just going to let an entire city just go off into the dust, because some Democrats were in charge of pension plans and fair wages in America.

But now, it`s the big banks. They are now asking the judge for first dibs on the city`s tax dollars. Residents stage a protest on Friday. I don`t think they`re going to give up. But apparently the banks want to pick the bones clean before Detroit can even get back on its feet?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We say take it from the banks. The banks destroyed Detroit. They trapped Detroit into high interest loans. And now, they`re demanding first lien on all tax dollars. And they want to take it from our pensions. So, we`re saying hell no.

(END VIDEO CLIP)

SCHULTZ: So they want first in. The big banks. Your tax dollars went to save the financial sector in this country.

Will your tax dollars go to float a loan to the people and the workers of Detroit to rebuild their communities? Hell no.

Big banks are the real parasites of Detroit, and the people are the victims in this. Union-busting is the really parasite. Conservative policies which help businesses out for years and are now saying, we don`t want to fund public education. We`re not going down that road. We don`t care what they did for all those years.

These are the real parasites who gutted Detroit. You know, I was honored last week. I received an e-mail from the president of Oxford University. And I have been asked to speak in October over in England at Oxford University at the debating society. They want to hear from a liberal, and the perspective of a liberal in American politics.

How in good conscience can I go over to Oxford and talk about America without mentioning Detroit? And what really has happened?

We now circumvent local elections in this country. We discard what people want and say about their communities. They don`t have ownership. It used to be a democracy. But, apparently now, it`s not.

We have corporations that refuse to invest in communities because you see, we have this attack on labor. We don`t like paying anybody anymore. In fact, we`ve even got a political party in America that is voted 40 times to take away health care from Americans.

We don`t care about the outcome. The only thing we care about is the chain. The only thing we care about is profit.

We are now developing a society of the haves and the have-nots. We`re attacking public education. We`re not investing in infrastructure. We have bridges that are falling down.

But America is a great country. You folks at Oxford ought to come over and check it out -- if you have money, because you see, we want to reduce your taxes if you`re the wealthy.

America has had greatness. And there are elements of this country that are unparalleled in the world. But we are falling from within by not counting on American workers in viewing workers as value, viewing communities that need to be resourced as the heartbeat of this country.

What changed?

More coming up on THE ED SHOW and future shows. I`ll tell you what`s changed.

Get your cell phones out, I want to know what you think. Tonight`s question: Who are the real parasites in Detroit?

Text A for conservatives. Text B for unions, to 67622. You can always leave a comment at our blog at Ed.MSNBC.com. We`ll bring you the results later in the show.

I`m joined by two people who are in the fight, who are living in Detroit and surviving this financial crisis. The president of the Detroit branch of the NAACP, Reverend Wendell Anthony, and homeowner Lee Gaddies.

Gentlemen, great to have you with us tonight.

(CROSSTALK)

SCHULTZ: I want to share with you -- you bet.

I want to share with you and get your reaction to something that Kevyn Orr, the city`s financial manager who was appointed by the governor. This is what he said. He told "The Wall Street Journal", "For a long time, the city was dumb, lazy, happy and rich."

He goes on to say that if you had an eighth grade education, you`ll get 30 years of a good job and a pension and great health care. Now that`s his quote.

Lee, your thoughts on that. Is that -- does that describe Detroit? Why are the insults coming the way they`re coming right now?

LEE GADDIES, DETROIT HOMEOWNER: Because they want to avoid the facts, Ed. Detroit has some of the hardest working, committed people in this country. Detroit labor built this country. You know, the auto industry created the middle class along with unions.

You know, they would love to play into their own narrative of bigotry and racism, even though Kevyn Orr is an agent of the governor and he is a man of color, he still is an agent of that bigotry and racism and he wants to play on that by making you think because Detroit is a majority city of color, that we`re all lazy and stupid and we don`t deserve anything that we have. And he`s wrong.

SCHULTZ: Reverend Anthony, going back to George Will`s comment, are unions a parasite on your city? And also address what he said about, you have a cultural problem. That is about as insulting and as racist as it gets. Or maybe you don`t view it that way.

I certainly believe that Rush ought to hush and George Will ought to chill, because what they`re saying is intellectually bankrupt, socially arrogant and basically just downright untrue. Haven`t these guys read the Kerner Commission report, commissioned by Lyndon Johnson in 1967? It came out in `68 -- which talked about the fact we would have cities, one black and one white, if we did not do certain things within the urban communities across this country.

He also said within that report that it was economic disenfranchisement. It was a social apartheid in American cities that were leading to this.

George Will talked about, or Rush Limbaugh even said that Coleman Young caused the riots. Coleman Young was not mayor of Detroit until six years later.

Coleman Young, by the way, was the only mayor in Detroit`s history to have a 50/50 administration, 50 percent white, 50 percent black. Folks forget that.

It is not single mothers, Ed, that caused a meltdown on Wall Street. It is not single mothers that cause General Motors and Chrysler to go bankrupt. It is not single mothers and the poor that caused the banking industry to meltdown and to do subprime loans. It is not single mothers and poor people that has caused the economic downturn in this country.

We get a bite with a smile from George Will. We get a bite with a growl from Rush Limbaugh. The bottom line is --

SCHULTZ: What about --

(CROSSTALK)

ANTHONY: -- poor folks, we need to have a policy not a social declaration of democracy.

SCHULTZ: OK.

Reverend, I want to you respond to Limbaugh`s comments blaming white flight. What about that?

ANTHONY: Obviously there has been a movement out of urban communities, in all urban communities around the country. That did not start with Coleman Young. That began years prior to that. After the riots, there was a great migration. Suburban communities are moving. The jobs are there.

So, it has nothing to do with Coleman Young. Coleman Young was one bringing folks together. We simply have to bring our society together. We have to look at the policies, Ed, rather than the rhetoric that folks are spewing out.

SCHULTZ: Well, the policies are, send the jobs overseas and let the neighborhoods fall apart. Everybody fends for themselves and concentrate the wealth. This is what we`re seeing.

Lee, what about your neighborhood? Did the destructions of the homes continue? Are they on the fast pace like the governor said they were going to be?

GADDIES: Well, thanks to your show, we`ve been able to stop them or put a pause in it for now. We had a meeting last week and we asked them if there is anything else that could be done with that $100 million other than tear down homes. They told us no.

So we told them to take the money and go someplace else in areas that needed to have homes torn down because if you have house that had are desirable, that people want to live in, and the banks refuse to take care of them, to maintain their property and they`re using tax money -- not their own money. They`re using our tax money the tear the houses down, that prevents houses from going back on the tax roles and that prevents our neighborhoods from able and are they`re leaving the debris in piles in our neighborhood.

Now, at this meeting, they told me that the governor -- the Michigan Department of Environmental Quality came to and said, some of the houses had asbestos and mold in it. So, they had to be torn. So, even though they looked sound on the outside, on the inside they were untenable.

So, I`m like -- well, if that was the case, why did you tear down the house, leave the debris field there for two weeks for people to bring in asbestos and mold next to a house that has a 2-year-old child living in it. So, if this is your case, you know, then you have a lawsuit on you hands because you just put our whole community in danger.

SCHULTZ: Yes, quickly, Reverend.

(CROSSTALK)

ANTHONY: I just want to say this, Ed. What Detroit needs are jobs, jobs, jobs. What Detroit needs is reinvestment.

What Detroit needs is for the government to assist Detroit, not to just give Detroit, but to assist Detroit in terms of job training, in terms of education, in terms of renovation and rehabilitation, in terms of the waterway that we have right next to our national, to a nation that`s right across the river. That`s what Detroit needs.

Detroit does not need people to beat her down.

SCHULTZ: There`s no doubt.

ANTHONY: Detroit needs people to lift her up.

SCHULTZ: Reverend Anthony and also Lee Gaddies, thanks so much for joining us. We`re going to stay on this story on THE ED SHOW. I think it is a travesty that we accept defeat in inner cities in this country. And for George Will to say that investment is not important, I just find it absolutely amazing.

Remember to answer tonight`s question there at the bottom of the screen and share your thoughts with us on Twitter @EdShow and on Facebook. We always want to know what you think.

Coming up, a wide receiver gets tackled over a racist remark at a country music concert. Find out why he is singing the blues on the sidelines.

And --

(VIDEO CLIP PLAYS)

SCHULTZ: Protests break out across the country. We`ll tell you what these workers want.

(COMMERCIAL BREAK)

SCHULTZ: Time now for "The Trenders." THE ED SHOW social media nation has decided and we are reporting.

Here are this week`s top trenders voted on by you.

(BEGIN VIDEOTAPE)

SCHULTZ (voice-over): Our number three trender: bird brain.

UNIDENTIFIED MALE: A racial slur uttered at a Kenny Chesney concert has brought Cooper far more attention than anything he has done so far on the gridiron.

SCHULTZ: Eagles wide receiver Riley Cooper`s offense goes viral.

RILEY COOPER, EAGLES WIDE RECEIVER: I will jump that fence and fight every (EXPLETIVE DELETED) here.

(INAUDIBLE)

COOPER: If I said something that was absolutely disgusting and terrible.

UNIDENTIFIED MALE: I still look at him as one of my brothers.

UNIDENTIFIED MALE: It hurt personally. But I don`t think that is a reflection of who Riley is.

COOPER: I shouldn`t have. I`m disgusted and I`m sorry.

SCHULTZ: Number two trender, pork politics.

COLBERT: Check out the latest dust-up in the Republican rumble between Chris Christie and Rand Paulie.

SCHULTZ: Two GOP favorites squeal over spending.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: If Senator Paul wants to start looking at where he`s going to cut spending to afford defense, maybe he should start looking, cutting the pork barrel spending that he brings home to Kentucky because most politicians only care about bringing home the bacon.

SEN. RAND PAUL (R), KENTUCKY: This is the king of bacon talking about bacon.

UNIDENTIFIED FEMALE: Increase the minimum wage to a livable wage is really the only humane option they have.

SCHULTZ: While Senator Bernie Sanders fights Republican lie.

UNIDENTIFIED MALE: Will raising the minimum wage help workers, will it kill jobs?

UNIDENTIFIED MALE: It sounds great until you ask the question, where is the money come from?

SEN. BERNIE SANDERS (I), VERMONT: Vermont has the third highest minimum wage. We have the fourth lowest unemployment rate in this country.

(END VIDEOTAPE)

SCHULTZ: Joining us now is Senator Bernie Sanders of Vermont.

Senator, great to have you with us on THE ED SHOW again tonight. I appreciate your time.

The question that that person posed was where does the money come from? I`m screaming at the monitor saying that corporate profits are through the roof. I mean, it`s almost like the other side is in denial.

I have to ask you, is there any chance that Congress is going to be able to get the country on its side when it comes to raising the minimum wage to the levels where people can have a decent wage and support themselves? Your thoughts, Senator?

SEN. BERNIE SANDERS (I), VERMONT: Ed, we already have the overwhelming majority of American people on our side who believe that the idea, that $7.25 is totally obscene. It is a starvation wage. And the American people believe absolutely that we should raise the minimum wage.

I hope we can get strong legislation to the Senate and I hope that by building a strong grassroots movement around this issue, we can force the House to do the right thing.

Bottom line is: we have a collapsing middle class. We have far too many people living in poverty. And one of the reasons for that is we have tens of million of people working at starvation wages. And while we have to create millions of new jobs, we also have to raise the minimum wage to a living wage.

SCHULTZ: Senator, what do you say to the folks who are saying, and in that debate that you had, that Walmart and McDonald`s can`t afford to raise the minimum wage?

SANDERS: Ed, the wealthiest in this country is the Walton family. They are worth about $100 billion. That is more wealth than the bottom 40 percent, 40 percent of the American people. One of the reasons that the Walton family, the owners of Walmart, are so wealthy, is that they receive huge subsidies from the taxpayers of this country. When you pay at Walmart starvation wages, you don`t provide benefits to your workers, who picks up the difference?

The answer is that many of the workers in Walmart end up getting Medicaid. They get food stamps. They get affordable housing paid for by the taxpayers of this country while the Walton family remains the wealthiest family in America.

If that is not obscene, I don`t know what is.

SCHULTZ: Senator, do you believe, of course, the Republicans have not helped out on any jobs package whatsoever they`re stuck in the mud. They don`t want to help. They don`t want to work with the Democrats. They don`t want to help this president on a jobs bill in any way, shame or form.

Do you think the Republicans want higher unemployment so people will be so desperate, they will go to these corporations and work for $7.25 an hour and have no voice and no push and no union to stick up for them whatsoever? Do you think the Republicans -- do you think that this is a conservative utopia? That they like everything the way it is right now?

SANDERS: Ed, let me take it a step further and this will shock you and shock some of your viewers. This is the truth. The fact of the matter is, is that there are many, many Republicans in Congress right now, perhaps the majority, who not only are opposed to raising the minimum wage. They want to abolish the minimum wage. That`s the truth.

And what they believe is that in a city like Detroit, or a high unemployment area -- and remember, 40 percent of the black kids in this country are facing unemployment, 20 percent of the young people in this country facing unemployment, 14 percent of the American people unemployed.

They believe that if they can hire, if an employer can hire a worker at $3 or $4 an hour, that`s fine. That`s freedom. Get government out of the business of regulating a minimum wage.

So, what I happen to believe is very, very different.

SCHULTZ: Senator --

SANDERS: Yes?

SCHULTZ: Yes, go ahead.

SANDERS: Well, it`s just that if we`re going to grow the middle class, we have to create decent paying jobs. And one way to do that is to raise the minimum wage to at least $10 an hour which is what the American people want.

SCHULTZ: What do you say to the fast food workers that are in a fight right now to push forward? I mean, I guess -- I don`t recall any time in the news cycle where we have seen fast food workers step out and be so vocal and on the verge of real organization here. What do you make of that?

SANDERS: Well, I was on the floor of the Senate last week, just expressing my extraordinary admiration for them, for their courage. And believe me, it takes a lot of courage to walk out of a fast food establishment knowing that you can be fired. What they are doing is standing up, not only for economic justice for themselves, they are standing up for all working Americans and saying that we have got to create a situation in this country where we are creating decent paying jobs. Not jobs that are paying a starvation wage.

So I have a lot of respect for what these young people are doing.

SCHULTZ: Senator Bernie Sanders, always good to have you with us here on THE ED SHOW. Appreciate your time this evening, sir. Thank you. Thanks for joining us.

Coming up, Rush Limbaugh is about to get bounced. We`ll talk about the slow death of conservative talk radio just ahead. Gosh, has the market changed because of what people have said.

But, first, I`m taking your questions. "Ask Ed Live" is just ahead. Stay with us. We`ll be right back at THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

We love hearing from our viewers.

Tonight, in our "Ask Ed Live" segment, the first question comes from Deborah. "Why are we not fighting harder, Ed, to stop the corporate takeover of public schools?"

Deborah, I think a lot of people in this country are in denial and don`t understand exactly what is going on, the systematic destruction, because there is a media force out there all on the same page. The conservatives who vilify public education every chance they get. It`s like their main theme of education. Teachers are bad, unions are bad. There is no sense in putting money into schools that aren`t productive and aren`t giving us the test results that we want.

I think there are a multitude of problems that are out there that are hurting public education and it all starts with a bad narrative and a lying narrative, coming from the conservatives.

And so I honestly think that education is so fundamental in our country`s history. We really don`t know how to fight back against this. How do you save public education? Nobody has ever really attacked it before until these jokers came along.

It is something we`re going to talk a lot about it. There is a corporate takeover of public schools take a place in this country, and I think that we are picking and choosing kids and neighborhoods.

Our next question comes from Marge. "Ed, would you please run as Hillary`s vice president?"

Wow! Do you think I should be vice president? Respect my time off a little bit. Hillary is a tough customer. I wouldn`t get anywhere near the amount of time fishing if I was working for Hillary Clinton. She is a hard driver.

Ain`t going to happen.

Stick around. The rapid response panel is next here on THE ED SHOW.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIPS)

UNIDENTIFIED MALE: That people that listen to 10 hours of talk radio a week are voting Republican by a 3-1 margin. Those are the people that elected the new Congress. That`s why this is the Limbaugh Congress.

(APPLAUSE)

SCHULTZ: As of today, I think we can finally put this back where it belongs in history. Right there.

(END VIDEO CLIPS)

Welcome back to THE ED SHOW.

Back in January I did a commentary on the waning influence of conservative talk radio on the political system in this country. My main point in all of this was Rush Limbaugh is less relevant than ever. And this week I was proven correct.

Cumulus Media is planning to drop both Limbaugh and Sean Hannity from its stations at the end of this year. The second largest syndicator in this country has decided it will not renew the contracts of Limbaugh and Hannity. They say negotiations are still going on. This will result in the shows being dropped from more than 40, what we call big AM stations and FM outlets in major markets across the country. Now, according to reports, the decision was made due to disagreements over distribution costs.

However, I have a different opinion. Rush Limbaugh and Sean Hannity have spent years on the radio spreading hate and lies about hard working Americans, and guess what? It doesn`t sell anymore.

(BEGIN AUDIO CLIPS)

SEAN HANNITY: Four more years of Obama will end America, the country we love as we know it.

LIMBAUGH: Obama is monkeying the number here, jJimmying around with things in an election year.

HANNITY: I don`t know what tomorrow`s job numbers are going to be. I have no doubt they`ll cook the books.

LIMBAUGH: Gun violence is plummeting. Here we have a totally made up crisis. In fact, I`ll bet, it is like global warming.

HANNITY: Now the president said Trayvon could have been me 35 years ago. Is that the president admitting I guess because what? He was part of the choom gang and he smoked pot and he did a little blow?

LIMBAUGH: In the fron` do` -- in an` out the fron` do`. Yes, I spoke a little Negro dialect. I can do that when I want to.

(END AUDIO CLIPS)

SCHULTZ: For more on the downfall of Rush Limbaugh, let`s turn to talk radio consultant, Holland Cooke. And also Mike Papantonio, host of "The Ring of Fire" radio show.

Gentlemen, great to have you with us tonight.

Holland, you first. How big a deal is it that Limbaugh and Hannity are going to be dropped from the Cumulus stations? I mean, this is a conservative company that has never taken an hour of liberal talk radio now saying that the big voices on the conservative dial, they don`t measure up anymore. They don`t make us any money. We can`t sell it.

This is for real and this negotiating in public is like nothing we`ve ever seen on talk radio.

Now, it may just be a dance. At the end of the day, nothing could change. But it sure seems ominous now.

And when you lose all those big stations and you have to relocate, here`s the problem -- radio listening is habit. And there are presets on the dashboard. What if the voice who is there the day after Rush Limbaugh leaves, hey, I kind of like this guy. That`s the problem.

SCHULTZ: All right. How much, Holland, did the Sandra Fluke ordeal take place? I mean, Limbaugh went after a private citizen who had a wanted to tell her story in front of a congressional committee. She became splashed all over the news a year and a half ago. Advertisers left. A lot of people lost their jobs. That has never really recovered in many respects.

Is this what`s hurting Limbaugh?

COOKE: Ed, this is costing his big stations money. And the commercials you hear on his show. It is always enter the promo code Rush. They`re all direct response deal because the blue chip advertisers have fled. And the problem is they haven`t just fled his show and the other righties. They`ve put the stink on talk radio generally.

"The Wall Street Journal" report, Accu-Weather, Charles Osgood, some real bread and butter talk radio programming, supported by commercials is now complicated because there are these "do not buy" lists at the major agencies and a lot of big national brands want nothing to do with talk radio.

SCHULTZ: Mike, what is the future for these right wing talkers and the effect it might have on other right wing talkers? You and I have had our challenges, no doubt, when it comes to liberal talk. Cumulus is never to my knowledge taken an hour of syndicated liberal talk radio. Yet, we`ve been told that it doesn`t sell. It does sell.

But now, this is the free market at work. What`s the future?

MIKE PAPANTONIO, RING OF FIRE: Well, the management sees that Rush is angry, excitable, aging audience is rapidly disappearing. I mean, Rush is experiencing exactly the same thing that the GOP is experiencing with diminishing demographics.

(INAUDIBLE) millennials, women, minorities, they`re not tuning in to crazy uncle talk. They don`t want to hear the big boys` toxic messaging. So, you add to that the saturation problem, Ed, where you have right wing hate talkers, flying monkeys everywhere trying to occupy that Rush space. At some point, it becomes monotonous. It becomes boring.

My bet is that you`re going to see cumulus replace these desperate wing nuts with more sports broadcasting. It`s less overhead. They`re more of a diverse audience. love that 25 to 53 audience. That`s almost perfect demographics.

Rush`s big contract days, Ed, are over. It needs to start, he needs to start investing this money. He has not had a creative idea in a long time and that`s hurting him.

If you think back, he used to be creative during the Clinton years. He`s less creative. He`s lost his edge.

And Cumulus, listen, these managers are brilliant. They understand business. They understand they can`t pay a windbag like this $20 million a year and lose $3 million the first quarter of business because his hate talking has cost him advertisers themselves cannot do business like that will.

SCHULTZ: Holland, what about that hate talk? I mean, is there a new level of acceptance for listeners?

COOKE: Well, it is the garden variety shock jock start. How far can you go? Pat is absolutely right about sports radio.

And do you know what I predict? In 2014, when all of this debt has been shuffled with Rush and Sean moving to different stations, I think you`re going to see a renaissance of local programming because it is now less expensive to find and fund a good local host where you keep all of the commercial inventory. You`ve got an ambassador on the streets in your market, you`ve got somebody who can could live remote broadcasts in your city, you can sell endorsements on the air -- a lot of the things a national show cannot do.

SCHULTZ: Yes.

COOKE: I think the economics are turning on Rush Limbaugh.

SCHULTZ: In so many ways, Mike Papantonio, has President Obama kind of infiltrated the conservative talk radio? Because they hate him so much, he`s, in a sense, led them down the path of destruction without even trying to do it. I mean, that`s what I think.

(LAUGHTER)

PAPANTONIO: He was brilliant. He was brilliant in a way that he opened up to this. He got in the discussion.

It`s almost as if he led them into the attack. It was how crazy can the conspiracy get. How much hate can we spew? Yes, it`s a brilliant move by Obama.

COOKE: Rope-a-dope. It`s rope-a-dope.

SCHULTZ: I think that the hatred that they spew towards President Obama, I mean, what -- we`re all Americans. We want the country to do well and prosper. We love debate. At least we used to. We`ve had 41 months of private sector job growth. That`s a solid number. Yet, we have all the bickering on the radio on the conservative side and the vilification that has taken place.

COOKE: Well, it`s what Mike said a minute ago. How long can any act stay hot?

To his credit, on Thursday, Rush Limbaugh celebrated 25 years on radio. Politics and personalities aside, that`s a lot. The current controversy is about where is he going to be on his 26th anniversary? How long can an axe stay hot?

SCHULTZ: Exactly.

Holland Cooke, Mike Papantonio, great to have you both with us tonight. Thanks so much.

COOKE: You bet, pal.

SCHULTZ: Tonight, in our survey, I asked you, who are the real parasites in Detroit? Ninety-five percent of you say the conservatives, 5 percent say unions.

Up next, Stuart Varney visits the curvy couch to launch an attack on grandma and grandpa?

We`ll be right back.

(COMMERCIAL BREAK)

SCHULTZ: And in pretenders tonight, a visit to curvy couch. Stuart Varney paid a visit to "Fox and Friends" to attack food assistance programs. This week`s target was the elderly.

(BEGIN VIDEO CLIP)

STUART VARNEY, FOX NEWS: The AARP, huge supporters of President Obama politically and financially. Big supporters of Obamacare. And now, they`re out there signing people up for food stamps.

UNIDENTIFIED MALE: But if they`re hungry, they should get it. If they qualify.

VARNEY: Yes. Should they? Should people be going out, give it to me, give it to me, give it to me now? You want that?

(END VIDEO CLIP)

SCHULTZ: You know, if keeping seniors in need from going hungry is just politics from the Democrats, I`d hate to see what Republicans have on the menu. The AARP is not big a supporter of President Obama. The organization is not a big supporter of Obamacare. The AARP is a supporter of care and the policies that will help protect a vulnerable group which is seniors.

FOX News wants to us believe that neglecting the elderly is what America really is -- they can keep on pretending.

(COMMERCIAL BREAK)

SCHULTZ: And punch in and punch out -- this is a story for the folks who take a shower after work. Moreover, Anthony Weiner.

The NYPD controversial stop and frisk policy is taking center stage of debate in this year`s race for New York City mayor.

(BEGIN VIDEO CLIP)

RAY KELLY, NEW YORK CITY POLICE COMMISSIONER: With a reasonable suspicion that someone is about to, is or has committed a crime --

O`REILLY: Opponents say it`s tantamount to racial profiling.

(CROSSTALK)

O`REILLY: -- industry, they don`t want aggressive policing, but they do want safe streets. So, you can have --

(END VIDEO CLIP)

SCHULTZ: Maybe our friends across the street should look at the numbers, if they matter. The NYPD made over half a million stops last year alone, 55 percent of those stopped were black, 32 percent were Latino, people of color. In fact, only 10 percent were white folks who were stopped.

So much for reasonable suspicion, according to the New York Civil Liberties Union, a whopping 89 percent of those stopped were innocent.

We wanted to know how people really feel about the policy, so THE ED SHOW asked some folks in New York City, in Bryant Park. Take a look.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Stop and frisk is a clever way to disguise racial profiling.

UNIDENTIFIED MALE: I`ve been stopped.

(LAUGHTER)

UNIDENTIFIED MALE: You`re not going to get frisked. I am, though, more than likely. Depending on what you wear, it might be a cold night and I need a hoodie. And we all know what that leads to.

UNIDENTIFIED FEMALE: I`m surprised he gets stopped so often. Usually he`s in a suit and tie.

(CROSSTALK)

UNIDENTIFIED MALE: I`m like, me? Really?

UNIDENTIFIED FEMALE: I see the negatives and positives to doing it.

UNIDENTIFIED MALE: No problem with it. They can check me any time. I think it`s a good thing. You never know who is carrying a weapon.

UNIDENTIFIED MALE: It would be nice if there`s a little oversight so there`s some accountability, so that no one can say, oh, he looks like a problem. Let`s pat him down.

UNIDENTIFIED FEMALE: I`d rather be safe than to be worried about what`s happening on the subways or anywhere else.

UNIDENTIFIED MALE: They should do it more random. I mean, I`ve never been stopped. Everybody says I look like a cop.

UNIDENTIFIED MALE: People might say he`s got corn rows, braids. He`s got chains. He`s got tattoos. But that just could be how he expresses himself. It doesn`t necessarily he`s up to no good.

(END VIDEOTAPE)

SCHULTZ: Joining me tonight is New York City comptroller John Lu, who is running for New York City mayor.

Mr. Liu, welcome to THE ED SHOW. I appreciate your time tonight. Thanks so much for joining us.

JOHN LIU (D), NYC MAYORAL CANDIDATE: Great to be on.

SCHULTZ: Tell us your position on stop and frisk. I mean, this is now the key issue with many New Yorkers. I mean, it comes down to how people are treated by people of authority on the street. What -- if you were mayor, would you continue this policy?

LIU: No, I would not. My position is clear. I`m against stop and frisk.

I don`t think it works. I think it its actually ripped communities apart from the police, so much that the cops have a tougher time doing their job and it makes it less safe for everybody.

I also think it`s a misappropriation of police resources. I believe in community policing which is what I would do, community policing where the cops are working hand in hand with pastors, with imams, with business owners, with community activists, who generally know where the problems are in their community. And if the cops would work closely with the community, they would be able to be that much more effective in reducing crime and keeping people safe.

Stop and frisk is stopping hundreds of thousands of people, almost all of whom have done nothing wrong. It`s not the way to deploy resources.

SCHULTZ: OK. So you definitely would get rid of the policy.

And Commissioner Kelly represents pretty clearly here the hard line on all this. If you were mayor, would you keep Commissioner Kelly or would you make a change?

LIU: I`d make a change. I`m looking for all new people throughout my administration. And the stop and frisk tactic is racial profiling. Let`s call it for what it is, it`s racial profiling that happens to be the biggest form here anywhere in the United States of America.

Look, it`s been three weeks since we got the Zimmerman verdict. Huge amounts of outrage here in New York City and beyond America. And this is a -- this is a problem where I think people are starting to get the idea, the sense that there is still this pervasive notion that, if you`re a young person of color, you must somehow be up to no good. And that`s probably what was going through Zimmerman`s mind. That could have been going through the jury when they made the verdict.

SCHULTZ: Yes.

LIU: You know, I think the sense that young people of color must be up to no good, I think it allowed Mayor Bloomberg, our own mayor here in New York City a few weeks ago to say that African-Americans, Latinos should be stopped even more than they are now, and that white people should be stopped less.

And, you know, this sense that young people of color are up to no good is also, I believe, the rationale and the justification behind the stop and frisk policy that really is not -- is not the best way to use resources. And there are other things that can be done, community policing that will be much more effective in keeping people safe and crime down.

SCHULTZ: Do you think it`s important, Mr. Liu, to understand what the cops on the street think about this? Do you think they`re put in an untenable position? And what about the way they do their job? Should they have input on this? Some of them might think stop and frisk is important.

LIU: You know, I have spoken to dozens of police officers in the community who actually are sent on assignments to conduct the stop and frisk. And the consensus that I hear is they don`t want to have to be able to do it. They are sent out there. They have quotas to meet.

You know, the mayor says there are no quotas. He says performance measures.

The reality is that the cops are doing things that they don`t necessarily want to do. I believe through community policing, we should give the cops more time to be in the community and get involved in knowing what`s happening out there so that they can really see who they`re protecting. And by having a much closer community-police relation, we can keep people much safer in New York City.

SCHULTZ: All right. Mr. Liu, I got straight answers from you tonight. That`s very rare when somebody is running for office.

LIU: Hold on a second you should have me more often then.

(CROSSTALK)

SCHULTZ: Appreciate your time on THE ED SHOW. We`re out of time. Thanks so much. I appreciate it.

That`s THE ED SHOW. I`m Ed Schultz. We`ll see you tomorrow night at 5:00 Eastern. Have a good one.

END

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.END

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